Please help me figure out capital gains.
Let's say that I bought 10 shares at $100/share with a cost basis of $1,000 and when it went up to $200/share after 3 months, I sold it for $2,000. Now I have a $1,000 short term capital gain.
Now suppose that the stock drops to $150 and I invest $1,500. Does this change the capital gain amount in any way? IOW, will I be taxed on the entire $1,000 or will it only be only $500?